CFR > Title 7 - Agriculture > SUBTITLE B—Regulations of the Department of Agriculture > CHAPTER XIV—COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE (parts 1400 to 1499) > SUBCHAPTER A—GENERAL REGULATIONS AND POLICIES (parts 1400 to 1409) > PART 1400—PAYMENT LIMITATION AND PAYMENT ELIGIBILITY FOR 2009 AND SUBSEQUENT CROP, PROGRAM, OR FISCAL YEARS > SUBPART C—Payment Eligibility (§1400.201 to §1400.213) > 1400.203—Joint operations.

1400.203—Joint operations.

(a) A member of a joint operation will be considered to be actively engaged in farming with respect to a farming operation if the member:
(1) Makes a significant contribution of:
(i) Capital, equipment, or land or a combination of capital, equipment, or land and
(ii) Active personal labor or active personal management, or a combination of active personal labor and active personal management, and that are:
(A) Performed on a regular basis,
(B) Identifiable and documentable, and
(C) Separate and distinct from such contributions of any other member of the farming operation;
(2) Has a share of the profits or losses from the farming operation commensurate with the member's contributions to the operation; and
(3) Makes contributions to the farming operation that are at risk for a loss, with the level of risk being commensurate with the member's claimed share of the farming operation.
(b) For a farming operation conducted by a joint operation in which the capital, land, or equipment is contributed by such joint operation, such capital, land, or equipment:
(1) To meet the requirements of paragraph (a)(1)(i) of this section, and if contributed directly by the joint operation and must not be acquired as a loan made to, guaranteed, co-signed, or secured by:
(i) Any person, legal entity, or other joint operation that has an interest in such farming operation, including either joint operation's members;
(ii) Such joint operation by any person, legal entity, or other joint operation that has an interest in such farming operation; or
(iii) Any person, legal entity, or other joint operation in whose farming operation such joint operation has an interest, and
(2) To meet the requirements of paragraphs (a)(2) and (a)(3) of this section, and if acquired as a result of a loan made to, guaranteed, co-signed, or secured by the persons, legal entities, or joint operations with an interest in the operation as defined, the loan must:
(i) Bear the prevailing interest rate and
(ii) Have a repayment schedule considered reasonable and customary for the area.
(c) If a joint operation separately makes a significant contribution of capital, equipment, or land, or a combination of capital, equipment, or land, and the joint operation meets the provisions of § 1400.201(b)(2) and (b)(3), the members of the joint operation who make a significant contribution of active personal labor, active personal management, or a combination of active personal labor and active personal management to the farming operation as specified in paragraph (a)(1)(ii) of this section will be considered to be actively engaged in farming with respect to such farming operation.

Code of Federal Regulations

[73 FR 79273, Dec. 29, 2008, as amended at 75 FR 900, Jan. 7, 2010]